Council convener Andrea Manson was one of two directors of the Mid Brae Inn Limited, which traded as a pub of the same name.

However, the company did not pay more than £110,000 in VAT and almost £60,000 in PAYE and National Insurance contributions between 2019 and 2023.

In this period, only £6,000 was paid to HM Revenue and Customs (HMRC) despite more than £800,000 being paid into the company’s bank account.

Ms Manson, 67, has been disqualified as a company director for three-and-a-half years.

Neil North, Chief Investigator at the Insolvency Service, said: “Andrea Manson holds a senior position in local government and was elected into office by residents of the Shetland Islands, taxpayers who will be required to pay council tax and other taxes.

“This is a position of responsibility and respect, yet she failed to ensure her company met its own tax obligations, leaving HMRC owed more than £170,000.

“Directors have a duty to ensure their companies pay the taxes they owe. This disqualification should serve as a warning that we will take action against those who fail to meet these basic responsibilities.”

Mid Brae Inn Limited failed to make any VAT payments to HMRC between April 2019 and January 2023, despite continuing to trade.

When the company went into liquidation in May 2023, it owed £110,675 in VAT and surcharges, and a further £59,227 in unpaid PAYE and National Insurance contributions dating back to 2018/19.

Including smaller amounts in corporation tax, the company’s total debt to HMRC was at least £178,860.

The Secretary of State for Business and Trade accepted a disqualification undertaking from Ms Manson, and her ban started on Wednesday 25 February.

It prevents her from being involved in the promotion, formation or management of a company, without the permission of the court.

Ms Manson’s co-director at Mid Brae Inn Limited, Catherine Davies, 64, was also disqualified as a company director for three-and-a-half years, with her ban coming into effect in November 2025.